Some people use the terms "deed" and "title" interchangeably, but there is a significant difference between the two— a distinction that's important for your buyers to understand when they're ready to purchase a home. So let's look at what distinguishes a deed from title. 

What’s the difference? 

A deed is a legal document used to confirm or convey the ownership rights to real property. It must be a physical document signed by the seller/ grantor. 

Title, however, is a legal way of saying someone has ownership of real property. Title is not a document, but a concept that says they have the rights to that property. 

So when buying a property, the buyer will receive the deed, a document that proves  they own it. That deed is an official document that shows that title to the real property has been conveyed to the buyer as the grantee. 

How to get the deed and take title of a property? 

To get the deed and "take title," or legally own the property, the title company will perform a title search. This ensures that the seller has the legal right to transfer ownership of the property to the buyer, and that there are no liens against it. If everything is clear, then at closing the seller will transfer the title to the buyer, and they become the legal owner of the property. 

In California, the title company will ensure the deed is recorded at the county recorder’s office or courthouse, depending on where they live. They'll generally get a notification a few weeks after closing escrow, that the deed has been recorded. At that point, they have the deed and title to the real estate and the property is all theirs. 

What's the role of title insurance? 

Even with all of the due diligence a title company does before closing, there can be rare instances when title problems can pop up later (e.g., missed liens and other legal issues that can be very costly to resolve). To protect against any financial loss, two types of title insurance exist: owner's title insurance and lender's title insurance. 

Unlike other types of insurance that protect the policyholder from events that may happen in the future, an owner’s title policy protects the buyer from events that have happened in the past that may jeopardize their financial interest, such as title defects, fraud, and unpaid liens against the property, or claims that someone else is the real, legal property owner. 

On the other hand, when securing a mortgage, the lender or bank will require that the buyer purchase lender's title insurance to protect the lender in case any title problems arise. Lender's title insurance protects the lender's interest in the property until the loan has been paid off.  

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